With Weinstein Era Ending, an Assessment of D-H’s Past, Present and Future

  • Dr. James Weinstein, CEO and President of the Dartmouth Hitchcock health system, left, walks the halls of the hospital's pediatric unit with RN Carol Majewski, director of patient experience, in Lebanon, N.H., Tuesday, March 28, 2017. The unit is under renovation to improve nursing stations, floors and lighting. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News photographs — James M. Patterson

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    "Keep Smiling" is written in Dartmouth green and white on a small card clipped by magnet to the door frame of outgoing Dartmouth-Hitchcock CEO and President in Lebanon, N.H. Tuesday, March 28, 2017. "The only thing that changes the mood around here is the finances," said Weinstein, who blames New Hampshire's low Medicaid reimbursement rates for the health system's recent financial woes. Weinstein plans to retire in June after six years as CEO. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Outgoing Dartmouth Hitchcock health system CEO and President James Weinstein talks with physician's assistant Gerome Gepigon, left, and nurse practitioner Kevin Armstrong, right, in the Dartmouth Hitchcock Spine Center in Lebanon, N.H., Tuesday, March 28, 2017 as Carol Majewski, back left, and Deb Kimbell, back right, wait. Weinstein will retire at the end of June. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News photographs — James M. Patterson

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    "Your Voice Matters" is the message on a button pinned to the white coat of Dr. James Weinstein, CEO and President of the Dartmouth Hitchcock health system, in Lebanon, N.H., Tuesday, March 28, 2017. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Dr. James Weinstein, CEO and President of the Dartmouth Hitchcock health system, bends to pick up a dead leaf of a potted plant that had fallen on the floor at Dartmouth Hitchcock Medical Center in Lebanon, N.H., Tuesday, March 28, 2017. Weinstein will retire at the end of June. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News — James M. Patterson

Valley News Correspondent
Published: 4/2/2017 1:01:08 AM
Modified: 4/2/2017 1:01:18 AM

Lebanon — In a nation where health care costs are too high and outcomes and quality too often disappoint, Dartmouth-Hitchcock Chief Executive James Weinstein set out to make the local health system a model for reform.

“As CEO I’m interested in managing the Dartmouth-Hitchcock system, but I’m also interested in national policy,” Weinstein, whose 5½-year tenure is scheduled to end when he retires at the end of June, said in an interview last week.

Weinstein, 66, said he had become the clinic and hospital network’s “first systemwide CEO” and had stayed in the top job, which paid $1.45 million in 2014, longer than the four years he originally intended. The system of hospitals and clinics he leads now has nearly $2 billion in annual revenue and 20,000 employees.

Under Weinstein, D-H pushed to change how health services providers get paid, made path-breaking investments in technology to make care more affordable and accessible in lightly populated rural areas, and spearheaded national initiatives to eliminate waste and improve outcomes in the care of chronic — and expensive-to-treat — illnesses and conditions.

And, Weinstein emphasized, his overriding aim was always to make D-H “one of the best quality organizations in the United States.”

But in recent months, financial strains and public controversies dimmed the luster of D-H’s reform efforts and its assiduously constructed and maintained image. Two years of operating deficits were followed by dozens of layoffs and the shutdown of a key innovation effort. High-ranking executives departed and there were rumbles of discontent among doctors, nurses and staff. Political and legal disputes created an unwelcome aura of controversy.

Now, with the search underway for a new leader for D-H, a look back at Weinstein’s tenure can highlight the challenges and choices that await his successor.

Mixed Verdict

December’s announcement of Weinstein’s impending departure included a glowing assessment from Denis Cortese, a D-H trustee and former CEO of the prestigious Mayo Clinic. Cortese called Weinstein “a visionary and transformative leader not just for the Dartmouth-Hitchcock health system, but nationally, as we seek to reform a broken health care system.”

Weinstein continually stressed the need for reform. He “spoke all the time about what was going to come and how we needed to change our thinking,” former Chief Nursing Officer Gay Landstrom said in an interview after she announced her decision to leave to become the top nurse in a Michigan health system.

But pursuing reform while leading a large organization is difficult, Landstrom added: “Being able to think about how you need to change, and (to) keep things operating today in the old model, and try and help the organization know when to take those steps toward the new model — that is really, really challenging.”

Weinstein undertook to reorient a complex organization toward cutting costs, keeping patients healthy and improving the quality of care. To do that, he sought to replace the existing fee-for-service payment arrangements that, according to critics, penalize providers who avoid wasteful tests or services or spend time with patients on care that is effective but uncompensated.

In a May 2016 Valley News interview, Weinstein said his team was “changing the whole marketplace here, creating a different structure with our affiliations (and) network, trying to move away from fee-for-service as fast as we can, trying to create what I call a sustainable health system.”

John Wennberg, a D-H doctor who founded the Dartmouth Institute for Health Policy and Clinical Practice and has been for decades an influential voice in national health policy debates, echoed Weinstein’s diagnosis but acknowledged that the patient — the existing health system — had not yet been cured. “You have to make sure that people attribute the status of this place now to the crunch of fee-for-service medicine,” Wennberg said.

But eliminating that crunch is not easy, Wennberg observed: “The culture is trying to change but the financial system won’t let it.”

D-H is a New Hampshire institution, but about 40 percent of its patients come from Vermont, according to health system officials. In fiscal 2016, more than half of D-H’s revenue came from government insurance programs. That included about 42 percent from Medicare, a federal program that covers seniors and some people with disabilities, and 14 percent from Medicaid, a state-federal program that covers some people with low incomes and few assets.

Weinstein blamed D-H’s recent financial woes on stingy reimbursement rates in New Hampshire’s Medicaid program. Those rates are lower than the national average, and those in Vermont, he said: “If the state of New Hampshire could figure out how to pay us even the average rate, or the rates of Vermont, we would not have a financial challenge.”

Of course, health care reform involves many players and interests, and the scope and depth of changes that can be implemented within a single institution are limited.

In an interview last year with a health industry consultant, Weinstein promised to push ahead past rough patches on the reform road. “In my mind, you don’t build something for today, you build something for the future because today is a mess,” he said.

Recent challenges disclosed by D-H have included problems with new computer systems and a deal in which some health system billing and revenue management functions were outsourced to the subsidiary of a large, private hospital company.

Some critics think that D-H’s pursuit of reform may have lessened its ability to meet its obligation as the prime care provider in its home region. At D-H there has been “a disconnect between the vision and the ability to manage day-to-day operations,” said John Eresian, a retired hospital executive who lives in southern New Hampshire.

Weinstein rejected that criticism. “We do the best things for our organization and the patients we represent and then we work with the governments, local and nationally, to try to effect change.”

Weinstein also said that he did not believe there are morale problems. “As I go around this organization, I don’t see the dissatisfaction, the unhappiness, that you may be hearing from others,” he said. “I see young nurses, young doctors who are quite proud of what they have.”

“The only thing that changes the mood around here is the finances,” he added.

Others describe low spirits. “I was very proud to be an employee of Dartmouth-Hitchcock but it doesn’t feel that way anymore,” said one D-H nurse who contacted the Valley News but asked that her name not be used so as not to jeopardize her job. “I think a fair majority of us feel a sense of relief” at the prospect of Weinstein’s retirement, she added.

Wennberg noted that some doctors have been unhappy, especially as their performance was measured with a Medicare metric called relative valuation units, or RVUs. “A lot of the dissension among the medical staff is because of the contradictory emphasis on RVUs and quality,” Wennberg said. “It drives the doctors crazy.”

Regional Medical Center

Mary Hitchcock Memorial Hospital opened in Hanover in 1893 during a period in which the number of hospitals and their role in health care expanded nationwide. That same year, the hospital that is now Valley Regional Healthcare opened in Claremont. Ten years later, small hospitals opened in Woodsville and Randolph.

In 1991, D-H moved to Dartmouth-Hitchcock Medical Center in Lebanon opened the 396-bed facility that remains New Hampshire’s largest hospital, and one of four with more than 295 beds. D-H, with more than 1,000 doctors, close ties to the state’s only medical school, a graduate medical education program and its own children’s hospital and cancer center, is the state’s only academic medical center.

Such centers pay for research and teaching as well as advanced care. In a 2012 report on “margin meltdowns” threatening the nation’s 130 academic medical centers, the accounting firm PwC warned: “Funding sources are changing, research costs continue to rise faster than sources of funding, and (academic medical centers) are perceived to be ‘high-cost’ providers in an accountable care environment focused on lowering costs.”

Unlike most other academic medical centers, D-H must generate revenue from a lightly populated rural area. In addition, it depends on financial support from two state governments with small tax bases and budgets.

Jim Squires, a retired physician who was co-founder of the Matthew Thornton Health Plan, an insurance program, and the New Hampshire Endowment for Health, a nonprofit advocacy organization, said D-H serves “a very tough place, I think, with a lot of challenges that many other big hospitals don’t face.”

But Weinstein said D-H is up to those challenges: “I think we function quite well as an academic medical center in a low-population state.”

National Model

During the summer of 2014, Dartmouth’s Osher Lifelong Learning Institute sponsored a gathering in the Hanover Inn to consider whether the Upper Valley could be “a national model” for health care reform.

The keynote speaker, Don Berwick, the former director of the U.S. Centers for Medicare and Medicaid Services, thought so. Berwick described this region as an “intellectual center” for reform and encouraged attendees to put into practice some of the ideas that had been developed here: “You have a chance to do something special.”

The origin of those ideas extended back to the 1960s, when Wennberg, a young physician with training in sociology and epidemiology, arrived in Vermont, where he had been tapped to lead a Great Society program that aimed to make advanced medical care more readily available in rural areas that were presumed to be underserved.

But Wennberg looked beyond that presumption, and began gathering data on how, and why, the use of medical care and certain treatments varied widely among Vermont towns. In 1973, he published his conclusion in Science magazine: There were large variations that were driven more by the ideas and habits of physicians in a locality and by the supply of hospital beds than they were by the needs or preferences of patients.

Wennberg and his critique of the status quo eventually found an intellectual home at Dartmouth. In 1979, he joined the faculty at the medical school, and in 1998 he founded the Center for the Evaluative Clinical Sciences. In 2007, Wennberg retired as the center’s director, and it was renamed the Dartmouth Institute for Health Policy and Clinical Practice.

The work of Wennberg and his colleagues was disseminated in the Dartmouth Atlas of Health Care, which was first published in 1996. The atlas uses Medicare data to analyze geographical and institutional variations in health care costs, quality and outcomes.

The atlas and accompanying analysis made Wennberg and others at the institute, including Elliot Fisher, the current director, influential voices in national debates about health policy. They have been “primary players from a research and analytic perspective driving the conversation about payment reform and parts of the Affordable Care Act,” said Steve Norton, director of the New Hampshire Center for Public Policy Studies and former head of the state Medicaid program.

Their voices have also been heard globally, including through the Wennberg International Collaborative, a network founded in 2010 that includes doctors and scientists from 21 countries and holds annual research and policy meetings.

Practicing Reform

Weinstein also has emerged as an influential voice in national policy debates. “Among American health care leaders, he is a visionary,” Berwick said in a recent interview. “He’s a real intellectual health care leader.”

Weinstein succeeded Wennberg as head of the center-institute. A back surgeon, Weinstein came to the Upper Valley from Iowa in 1996 and helped found D-H’s Center for Shared Decision Making, which provides counseling and educational materials to patients and families.

In 2010, Weinstein also became part of a “troika” that led D-H until, in November 2011, he became sole CEO. He was chosen in part, he said in a 2016 interview, because his work on health care reform prepared him to make D-H “a place where we can show how it works.”

D-H has changed under Weinstein. A new, $22-million palliative care center, named for Jack Byrne, a prominent Upper Valley philanthropist who died in 2013, is slated to open in November. Dartmouth College arranged most of the financing for the $102 million, 160,000-square-foot Williamson Translational Research Building, which opened in September 2015 on the D-H campus, but D-H raised $11 million in a 2016 bond issue.

But instead of bricks and mortar, it seems clear that, to Weinstein, the legacy that will matter most will be the impact and durability of D-H’s contributions to reform.

There is a long list of such contributions. It includes the High Value Healthcare Collaborative, a network that includes 10 nonprofit health systems that seven years ago joined with D-H and the Dartmouth Institute to find ways to reduce costs and improve outcomes in the treatment of common or chronic diseases. “Simple things that don’t cost a lot of money can make a huge difference to patients and their families,” Weinstein said in a 2016 interview.

The collaborative has had mixed results. For example, a $26 million project funded by the U.S. Center for Medicare and Medicaid Innovation hit some cost-reduction, outcome and quality targets but missed others. The project reported to CMMI that it was “successful in moving the needle toward value-based patient care and setting the stage for future success.”

D-H also has been a health technology incubator of sorts. At an Osher event last summer, Weinstein shared the stage with leaders of D-H units that were using video to provide care to patients at remote locations and mobile devices to monitor health and care of patients with chronic conditions.

The telemedicine venture is ongoing and has been a lifesaver, Weinstein said. “Health care is too expensive,” he said. “You need to find new ways to help people in rural communities that don’t have seven hospitals in their backyard.”

Currently, telemedicine connects D-H to intensive care units with 200 beds in 46 hospitals in seven states, and is used to provide emergency and pharmaceutical services to seven hospitals, he said.

The remote monitoring venture — a for-profit unit dubbed ImagineCare — proved less viable. In January, D-H shut down ImagineCare after Microsoft stopped making the mobile devices used in the project and no outside investors materialized.

In an interview last week, Weinstein said ImagineCare had been extremely successful, and that scientific papers documenting its effectiveness were in the works. The unit was also about to be sold, he said, although he did not disclose details.

D-H also had mixed results with payment reforms. It helped launch OneCare Vermont, an accountable care organization that ties Medicare payments to measured gains in care quality and patient health instead of fee-for-service.

OneCare Vermont, which, according to its website, now coordinates the care of 42,000 of the state’s 118,000 residents covered by Medicare, is also set to play a central role in developing a so-called all-payer system. That Vermont project aims to extend payment reforms to the Medicaid and commercial insurance programs in the state.

In New Hampshire, D-H joined and then left an early accountable care organization after getting socked with financial penalties despite meeting care quality guidelines and posting costs that were lower than national benchmarks, according to an account published in Modern Healthcare magazine. In January, D-H resumed participation in a retooled Granite State ACO program.

Weinstein said D-H had been able to influence the development of a revised program, in part because it had helped shape the original ACO law: “We’re privileged that they actually listen to us and take our advice, based on the data, to make changes in policies that affect the whole country.”

And then there is D-H’s Center for Shared Decision Making, which operates out of a small office in the hallway leading from the main entrance at DHMC to the food court. The center, “although small, is mighty,” Weinstein said.

Shared decision making is “about helping patients make difficult decisions about their treatment choices that are hard to understand,” Weinstein said. “I think our physicians, nurses and our organization have adopted that across the organization.”

But Wennberg, who worked with Weinstein to launch the center, said there is still a long way to go. “We wanted to have this emblem on the wall that Dartmouth is the first academic medical center to establish shared decision making as a central diagnostic function,” Wennberg said. “It never got there. But it might still.”

Financial Woes

In recent years, D-H endured big financial and operational challenges.

The financial pot boiled over last August, when one bond rater lowered the grade on D-H’s securities, and a rival rater put the health system’s credit on a watch list. Both have since removed D-H from their watch lists for downgrades.

The August downgrade followed D-H’s discovery of a $39 million operating deficit in the fiscal year that ended June 30. D-H attributed much of the deficit to glitches in new computer systems and problems associated with the outsourcing of billing and revenue management operations.

D-H responded with a financial improvement plan in which 84 employees lost their jobs. According to a financial analyst, D-H saved $80 million with job cuts and “supply chain and physician productivity initiatives.”

Soon, a new controversy emerged. Mark Israel, the former director of D-H’s Norris Cotton Cancer Center, sued the health system alleging it improperly used donations including some made to the Prouty, the center’s main annual fundraiser and a key emblem of D-H’s community support. D-H denied misuse of donations, but also said it would restore $6 million to cancer center accounts and tighten governance arrangements.

Israel wasn’t the only high-ranking executive to leave D-H in the past year. Six of the nine executive vice presidents who a February 2016 organizational chart showed reporting directly to Weinstein have also moved on.

Other changes added to the stress level. Last year, the jobs of hundreds of researchers and the entire psychiatry department moved from Dartmouth’s Geisel School of Medicine to D-H. The job shift was part of a restructuring plan to address a $30 million deficit looming at Geisel.

Some employees were unhappy, including several psychiatrists and other professionals at New Hampshire Hospital, the state mental health facility in Concord. Job offers were withheld from some who balked at their new terms of employment.

The dispute with the psychiatrists worsened D-H’s sometimes fractious relationship with New Hampshire elected officials.

A sore point has been New Hampshire’s Medicaid Enhancement Tax on hospital revenue, and a related subsidy, known as disproportionate share payments.

The Medicaid tax, which was initially coupled with that subsidy in an arrangement designed to protect hospital revenue, was created to boost the flow of federal dollars to New Hampshire through the state’s Medicaid program.

When tighter federal rules choked the flow of subsidies, large hospitals got stuck with tens of millions of dollars in tax obligations. They sued, and won a settlement that restored most of the subsidies.

But Chris Sununu, New Hampshire’s new Republican governor and a sharp D-H critic during the psychiatrists’ contract dispute, has proposed a budget that would cut the subsidies substantially. The state hospital association has estimated that the budget proposal would fall $75 million short of the state’s $241 million subsidy obligation, but David Abrams, a spokesman for Sununu, said that he “continues to feel his budget uses the most appropriate number.”

Coupled with the state’s already low Medicaid reimbursement rate and lingering uncertainty about the future of that program and the Affordable Care Act, the potential for financial friction between D-H and its home state seems high.

Weinstein said he thinks Sununu should move to ease that tension by appointing a bipartisan commission to look at reimbursement levels and other issues in the state’s Medicaid program and find ways to lower premiums for commercial health insurance and further expand health insurance coverage.

Abrams said he would inform Sununu of Weinstein’s proposal but had no immediate comment.

Affiliation Nation

D-H’s efforts to shore up its financial future also have included efforts to gain control of hospitals in southern New Hampshire. Norton, of the New Hampshire Center for Public Policy Studies, said D-H is “to some extent ... a victim of geographic distance from population centers.”

In a letter summarizing the results of March meetings of D-H’s governing boards, Chairwoman Anne-Lee Verville described the health system’s “southern strategy.” Verville reaffirmed an approach spelled out by Weinstein in August that outlined a “sustainable academic health model” in which D-H would have “a catchment area with a sufficiently sized population, affiliated health system network and a health plan/insurance partnership.”

Under Weinstein, D-H assembled some pieces of that model. It formalized its control of a number of smaller hospitals: New London in 2013, Mt. Ascutney in Windsor in 2014, Cheshire Medical Center in Keene in 2015 and Alice Peck Day Memorial in Lebanon last year.

But its white whale of affiliations — a tie-up with one of the large hospitals in Manchester, New Hampshire’s largest city — has so far eluded D-H. In 2010, state regulators blocked D-H’s bid to acquire Catholic Medical Center, the state’s second-largest hospital. More recently, in February, D-H and Elliot Hospital, the state’s third largest, announced that on-again, off-again affiliation talks were off again.

D-H is not the only academic medical center eyeing southern New Hampshire. Boston-based Partners Health Care, a health system built around teaching hospitals affiliated with Harvard University, has looked north and begun doing affiliation deals in the Granite State’s southern tier.

The competition there could be intense, Norton observed. “Most of New Hampshire’s population is in three counties — Rockingham, Hillsborough and Merrimack — and the center point of each is an hour from Boston and an hour from Dartmouth,” he said. That puts pressure on D-H to “have the brand and recognition for people to head north and west as opposed to south” when they need high-level health care, he added.

But Weinstein shrugged off the rebuffs. D-H still “plans to have a significant footprint” in southern New Hampshire, he said. “We’ll work with everybody to do that, whether we’re affiliated or not.”

Searching for a Successor

The work of choosing the physician to succeed Weinstein — D-H bylaws specify that the CEO must be a doctor, according to Weinstein — is in the hands of a 10-member committee comprising mostly trustees and led by Verville, a retired IBM executive, and member William Conaty, the former human resources chief at General Electric.

In a statement, Verville and Conaty said the committee had used interviews with 130 individuals inside and outside D-H and a survey of 900 people inside D-H, to develop a “robust position description.” Committee members “are now actively engaged in the search process,” they said.

The new CEO will be expected to “build on (Weinstein’s) vision and accomplishments,” Conaty said in a news release.

The health system, according to Norton, will sooner or later “have to face the question of what it hopes to be: a regional tertiary institution focused on New Hampshire and Vermont, or are they going to try and broaden their engagement?”

That’s an easy one, according to Wennberg, who said he believes it is important for D-H’s CEO to continue efforts to make it a health care reform exemplar. “You give up leadership on this and you’ve created nothing but an ordinary academic medical center,” he said. “You don’t want that.”

But D-H could eventually face the more fundamental choice of whether to become part of a larger system, according to Weinstein. “I think there will be 15 to 20 health systems in the United States in the future,” he said. “I could imagine Dartmouth-Hitchcock being part of another system.”

In the meantime, he added, residents and elected officials in the Granite State might want to pause to better appreciate D-H. “I would hope that the state realizes the gem it has here in the Upper Valley.”

Rick Jurgens can be reached at rjurgens@vnews.com or 603-727-3229.

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